M&A Weekly Digest – December 23th, 2011

Deal Velocity

“Experienced dealmakers frequently use the term “deal velocity” as a measure of deal making activity. This term refers to the speed with which deals are closing. Logically, the faster deals are concluding, the more deal closings are occurring. Although this can be tough to quantify in a macro sense, if you talk to individual dealmakers you can get a feel from them about how fast their plate of deals are turning. The faster their deals are turning, the more interest you see on the part of buyers. The two go hand in hand.

So we found it quite interesting in reviewing Pitchbook’s recently released Decade Report that deal velocity has gone up dramatically, as indicated by the average number of months between deal closings (the report covers equity firm deal making from 2001-2011).”

Keeping Your Focus While Selling Your Business

“In this era of cost cutting and renewed focus on operational efficiencies, it is quite clear that all too often business owners don’t spend as much time as needed on their most important resource: their customers.”

The rest of the article discusses how business owners can keep their focus and sell their business at the same time.

Private Equity and Creating Value

“Private equity firms have been sullied in recent years largely due to the sins of a small minority of their brethren. Prior to the financial crisis, equity firms specializing in huge, billion-dollar deals involving loads of leverage got all the press, and most of it negative, as these firms placed significant amounts of debt on their acquired companies to finance these deals. Of course once the financial crisis hit and the availability of debt dried up, these types of deals went away as well.

Largely unnoticed and ignored have been the equity firms that specialize in acquiring companies the old fashioned way: strategically, with a goal of growing them, combining them with other companies, and providing existing ownership with the opportunity to participate in secondary liquidity events later on. When we come across a deal announcement that highlights this type of scenario, we like to point them out in this publication.”

About Lindsey Perkins Wade

The Private Business Owner – A Generational Equity Blog

The Private Business Owner is an online publication sponsored by Generational Equity. PBO aims to provide useful tips and information that will improve both the lives and businesses of entrepreneurs, as well as provide valuable insight into the company exit process through bi-weekly M&A Digests.